 Hello everyone and welcome to Everyday Money Lesson. I am Shifra Singh and today we are going to talk about 4 cardinal rules of money management that everyone should follow to live a financially stable life. The very first and the most important rule to include in your financial plan is to spend less than you earn. The easy way to ensure this is to create a puzzle and check whether your expenses are in line with your income or not. Note down your fixed expenses like rent, commute and utility bills and non-essential expenses add them all up and deduct it from your income. If you get a negative number you are spending more than you earn and it is fine when you start cutting back on your expenses. This exercise is important because if you don't track how and where you are spending your money, it is easy to broke even before the month ends. For credit card users doing away all their income is even easier as credit can create an illusion of higher portfolio. Ideally the leftover amount that you get after removing fixed expenses from your income is what you should spend and save. This gets us to our second rule that you should save at least 10% of your income each month. Saving regularly empowers us to spend on things without having to borrow and shoulders us during emergencies and yet many of us postpone including saving in our budget as we give spending precedence over saving. That's not the correct approach. The right way is to save first and spend later but how much should you save? Financial targets say that 10% is the bare minimum that should be stashed away at the start of the month before you start spending. You can either automate this in a liquid fund or start a recurring deposit or simply transfer it into a secondary savings account. After you have put away your savings and paid all your bills the leftover amount is what you can utilize for aspirational spending. However don't go overboard in spending by borrowing for your menstruational expense which brings us to our third rule control your debt. Let's begin this by looking at data from RBI on household debt. Household debt of Indians has increased significantly between financial year 14 and 19 and the share of personal loans and credit card debt alone has more than doubled in this period. Easy availability of credit encourages spending and can easily push you into a debt trap if not used responsibly. You should try avoiding taking loans completely for discretionary spends but if you do have to borrow make sure that AMIs should not exceed 20% of your income. Also when you take a loan make it a priority to repay it before you take any more loans as multiple loans affect your ability to build wealth in the long term. Now to build wealth investing is important and this is our fourth rule. Saving helps us to create a safe ticket for emergency but investing is essential to fulfilling future financial goals. Don't let your savings idle away in deposits or saving account as inflation can eat into its budget once you have accumulated the quarters for emergencies. Start investing your savings in suitable financial instruments to grow that savings. Start by mapping out your goals depending on the time horizon of those goals and how much risk you can take with your investments. Invest across a mix of financial products.